Latest news with #Absa
Zawya
10 hours ago
- Automotive
- Zawya
South African rand gains before manufacturing PMI, vehicle sales data
The South African rand gained some ground against a weaker dollar in early trade on Monday, 2 June 2025 ahead of a purchasing managers' index (PMI) survey for the domestic manufacturing sector and vehicle sales figures. At 0602 GMT, the rand traded at 17.9475 against the dollar, about 0.2% firmer than Friday's closing level. The Absa PMI for May is set to be released at 0900 GMT and will shed light on manufacturing conditions in Africa's most industrialised economy. Local investors will then turn their focus to vehicle sales data due around 1200 GMT, giving a snapshot of consumer demand for big-ticket items. Nedbank economists said they expect annual growth in new vehicle sales to have accelerated from 11.9% in April to 20.4% in May, reflecting last year's low base and easing financial conditions due to interest-rate cuts. The dollar last traded about 0.2% weaker against a basket of currencies as US-China trade tensions continued to simmer and investors turned defensive ahead of US jobs data. South Africa's benchmark 2035 government bond was little changed in early deals, with the yield up 0.5 basis points at 10.16%.
IOL News
12 hours ago
- Business
- IOL News
SA's manufacturing activity firmly in contractionary territory in May
The Absa Purchasing Managers' Index (PMI) released on Monday indicated that the seasonally adjusted PMI decreased by 1.6 points to 43.1 in May 2025. Image: Supplied The Absa Purchasing Managers' Index (PMI) released on Monday indicated that the seasonally adjusted PMI decreased by 1.6 points to 43.1 in May 2025. Absa said that the PMI remained in contractionary territory for a seventh consecutive month. The PMI suggests that the manufacturing sector continued to suffer in May, despite some flickers of activity and demand improvement, albeit at extremely low levels. 'However, a decline in the supplier deliveries index pushed the headline PMI lower. The business activity index indicated some improvement, increasing by 3.4 points to 43.4 in May. New sales orders also increased, by 2.2 points to 38.3 in May. This was likely due to domestic demand recovering slightly as export sales continued to deteriorate at a rapid rate.' Absa said the supplier deliveries index has been tricky to interpret since the Covid-19 pandemic. 'Across the globe, the traditional signal of an increase being positive (with the index being inverted, so slower deliveries are seen as a positive sign as they are caused by increased demand for supplies) was no longer valid, as supply-chain bottlenecks and delays, and not higher demand, caused slower deliveries.' The purchasing price index decreased by 7.9 points to 60.4 in May due to fuel price cuts at the start of the month. 'A lower Brent crude oil price and a stronger rand, despite the fuel levy increase, bode well for further fuel price declines at the start of this month.' Absa added that the index tracking expected business conditions in six months' time increased by a significant 13.9 points to 62.5 in May, the highest level since the end of 2024. 'Sentiment improved as global tariffs were suspended, and businesses showed faith that local political disagreements on policy within the government would be resolved.' Investec economist Lara Hodes said, "The slide in the index was partly underpinned by a decrease in the suppliers' delivery index, which fell from 56.6 to 49.0. According to the BER, the decline in the index (the index is inverted so a decline suggests faster deliveries) could technically mean that logistical constraints are easing.' Hodes added that the business activity and new sales orders' indices remained subdued, well below 50, but did pick up modestly in May, despite a continued weakening in export sales. 'Worryingly, the employment index fell further into contractionary territory in May with a reading of 40.0 (42.9 previously). It has been in negative territory for fourteen consecutive months. Hodes said addressing the country's unemployment crisis remains a key imperative of the government. 'However, to achieve this, we need a substantial lift in confidence, driving investment and accordingly economic growth. Purchasing prices declined notably in May by 7.9 points to 60.4, supported by a further cut in fuel prices. Favourably, the index measuring anticipated business conditions (in six months' time) moved back into expansionary territory, reaching the highest level since the end of 2024. It climbed 13.9 points to 62.5.' Dr Eliphas Ndou, an economist and author at Unisa's Department of Economics, said the latest Absa Purchasing Manager Index indicates the manufacturing sector is struggling and is susceptible to weak demand conditions, political and trade uncertainty, which has implications for economic growth and employment outlook in the country. 'The Absa PMI has a statistically strong and positive co-movement with economic growth and is a leading indicator of economic growth. This means an improvement in the indicator would signal an improvement in economic growth. Whilst a weakening in the Absa PMI signals a weakening in economic growth.' Professor Waldo Krugell, an economist at North-West University, said that the PMI is still in contractionary territory and this is worrying for the growth prospects of the economy. 'The expectations are that this week's quarter one growth figures are not going to look good, but the PMI has shown business struggling in April and May as well.' Professor Bonke Dumisa, an independent economic analyst said that he is not surprised about this negative Absa PMI. 'The buyers in most manufacturing companies are usually the most conservative in the business, believing it is safest to adopt a cautious approach and be accused of opportunity cost in case they run short of products. The global uncertainty created by Trump's tariffs, wars and other consequential impacts of his "Executive Orders" have resulted in most buyers becoming very pessimistic about the business conditions. BUSINESS REPORT
IOL News
a day ago
- Business
- IOL News
South African homeowners show resilience in property market amid challenges
home ownership, property, house, investment, expenses, home buyer, bond repayment, insurance, maintenance, levies The Absa Homeowners Sentiment Index for the first quarter of 2025 was expanded to include new questions exploring consumer perspectives on sustainable living and emerging trends likely to influence this in the future. The index showed a growing aspiration among South African homeowners to live off-grid, with many seeking to replace municipal and state-provided services – particularly electricity and water – in pursuit of greater sustainability and self-sufficiency. Image: File Illustration Homeowner sentiment fell only 2 percentage points to 85% in the first quarter, still the second highest reading for Absa's Homeowners Sentiment Index (HSI) in a decade, which indicates that the momentum of positive sentiment is likely to continue into 2025. The authors of the latest HSI, first developed in 2015 as an indicator of the state of consumer confidence in South Africa's property market, said the dip in confidence was likely due to uncertainty around US policy direction and the South African Reserve Bank's decision not to implement a widely anticipated interest rate cut in March. The index results are broadly in line with the latest FNB Property Market Report that was released recently, which showed there was a continued, albeit modest, upwards trajectory in home values in the first quarter, which had averaged 2.2% year-on-year growth in April, up from 2% in March. The HSI showed that buying sentiment held steady at 77% in the first quarter, maintaining gains in the previous quarter. The average age of homebuyers also continued to decline, with first-time buyers entering the market at 38, and property investors at the age of 43. Selling sentiment fell marginally to 49%, down from 51% in the fourth quarter of 2024. Many sellers are still adopting a wait-and-see approach, anticipating that they will get better prices in the future, said Nondumiso Ncapai, Managing Executive: Absa Home Loans. In the first quarter of 2025, the Index was expanded to include new questions exploring consumer perspectives on sustainable living and emerging trends likely to influence this in the future. The index showed a growing aspiration among South African homeowners to live off-grid, with many seeking to replace municipal and state-provided services – particularly electricity and water – in pursuit of greater sustainability and self-sufficiency. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ 'We're seeing households take a more proactive stance on sustainability, not just through energy and water alternatives, but also through lifestyle changes that signal a broader recalibration of what homeownership means in today's environment,' said Ncapai. More than three-quarters (76%) of respondents indicated a desire to move away from state-supplied electricity, while nearly half (49%) expressed interest in replacing municipal water sources. Households were also adopting more sustainable practices in their daily lives, with 57% cultivating fruit and vegetable gardens and 42% using solar power for electricity. A majority of homeowners (64%) are exploring borehole and filtration systems, while 53% are considering rainwater harvesting to improve water security. Buy versus rent sentiment dropped by 4 percentage points in the first quarter. While many renters noted they had now saved enough for a deposit or sought more space, others continued to favour renting for its flexibility and perceived affordability. Renovation sentiment fell by 3 percentage points to 79%, with most homeowners citing value adding improvements and quality-of-life enhancements as primary motivators. Rising input costs remain a barrier for many. Investment sentiment held firm at 85%, sustaining its highest level on record since the Index began. While concerns around economic conditions and the country's long-term trajectory remain, property continues to be viewed as a resilient investment vehicle.
The Citizen
a day ago
- Business
- The Citizen
Manufacturing PMI falls to lowest level since April 2020 — bad news for GDP
The outlook for economic growth in South Africa is not great, and the new PMI and GDP data is not expected to be great either. Manufacturing PMI fell to its lowest level since the pandemic in May, signalling that the manufacturing sector remains under pressure after a poor start to 2025. This is not good news for the GDP statistics for the first quarter that will be announced on Tuesday, 3 June. The Absa Purchasing Managers' Index (PMI) is an economic activity index based on a survey conducted by the Bureau for Economic Research (BER) and sponsored by Absa. According to the BER, the seasonally adjusted PMI decreased by 1.6 points to 43.1 in May 2025 from 44.7 in April and 48.7 in March. Jee-A van der Linde, senior economist at Oxford Economics Africa, says the headline PMI remained in contractionary territory for a seventh consecutive month. 'This suggests that the manufacturing sector continued to suffer in May, despite some flickers of activity and demand improvement, albeit at extremely low levels. However, a decline in the supplier deliveries index pushed the headline PMI lower.' ALSO READ: Manufacturing PMI for April shows deteriorating SA economy Modest increase in business activity and sales orders The business activity and new sales orders indices rose modestly in May, likely driven by an uptick in domestic demand as export sales continued to deteriorate rapidly, he says. The survey findings were inconclusive on whether the decline in the inverted supplier deliveries index was due to easing logistical constraints or lower demand. Meanwhile, the employment index continued to decline, remaining in contractionary territory for 14 consecutive months. The index tracking expected business conditions in six months' time increased sharply to its highest level since the end of 2024. Van der Linde says the survey findings suggest that sentiment improved after global tariffs were suspended and businesses were hopeful that local political disagreements on policy within the government would be resolved. ALSO READ: PMI down slightly with concerns about global trade uncertainty How manufacturing slipped further in May This chart shows how manufacturing PMI slipped further in May, pressured by soft local and international demand: Source: BER ALSO READ: This is where we would be if SA sustained an economic growth rate of 4.5% PMI at lowest level since April 2020 Van der Linde says the headline PMI has fallen to its lowest level since April 2020, when it was 30.9, emphasising just how weak demand is for South African manufactured goods. 'The employment index has remained in contractionary territory for the past 14 months, as manufacturers continue to scale down production due to stagnant demand.' He says the manufacturing sector is expected to weigh on first-quarter real GDP growth, and that looks likely to be the case in the second quarter as well. 'First-quarter economic data releases have been weak, pointing to 0% growth in the first quarter of 2025 compared to the fourth quarter of 2024. A quarterly contraction cannot be ruled out. Our below-consensus real GDP growth forecast for 2025 remains at 1.0%.' This table shows the subcomponents of the Manufacturing PMI fared over the past three months: Source: BER
Zawya
a day ago
- Business
- Zawya
South African factory conditions deteriorate further, Absa PMI shows
JOHANNESBURG- A gauge of South African manufacturing sentiment fell further in May, with survey respondents citing persistent logistical issues that have held back demand. The seasonally-adjusted Purchasing Managers' Index (PMI) sponsored by South African bank Absa declined to 43.1 points from 44.7 in April. It was the seventh straight month that the headline PMI has been below 50, reflecting a deterioration in business conditions. One bright spot was the sub-index tracking expected business conditions in six months' time, which increased to the highest level since the start of the year as global tariffs were suspended and firms expressed optimism that local political disagreements over policy would be resolved. "The May PMI results underscore the fragile state of South Africa's manufacturing sector," Absa said in a statement. "While forward-looking sentiment has improved, underlying demand and activity levels remain weak, and structural logistical challenges persist." State-owned logistics group Transnet struggles to provide adequate freight rail and port services due to equipment shortages, maintenance backlogs and damage to its infrastructure from theft and vandalism.
